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Unformatted text preview: CHAPTER SEVEN THE MANAGER AS A DECISION MAKER OVERVIEW OF THE CHAPTER In this chapter, we examine how managers make decisions and explore how individual, group, and organizational factors affect the quality of the decisions they make. We discuss the nature of managerial decision-making and examine some models of the decision-making process that help reveal its complexities. The main steps of the decision-making process and the biases that may cause capable managers to make poor decisions are explored. Finally, we explore how managers can promote organizational learning and creativity and improve the quality of decision making throughout an organization. LEARNING OBJECTIVES 1. Differentiate between programmed and nonprogrammed decisions, and explain why nonprogrammed decision-making is a complex, uncertain process. 2. Describe the six steps that managers should take to make the best decisions. 3. Explain how cognitive biases can affect decision-making and lead managers to make poor decisions. 4. Identify the advantages and disadvantages of group decision-making, and describe techniques that can improve it. 5. Explain the role that organizational learning and creativity play in helping managers to improve their decisions. A MANAGERS CHALLENGE: YAMADA TRANSFORMS GLAXOSMITHKLINE GlaxoSmithKline needed a transformation. As the CEO of the newly merged company put it, We cant keep doing what were doing.. so start thinking about something radical. Tachi Yamada, a top manager at the company, responded to this challenge by reorganizing the R&D function and thereby changing the way decisions were traditionally made at his company. Tachi Yamada decided against combining the R & D departments of Glaxo Wellcome and SmithKline Beecham, the two companies that merged to create his current employer, Glaxo. Instead he decided to restructure R & D by forming autonomous, entrepreneurial start-up labs to develop new drugs. Yamada divided R & D into six small, semi-autonomous labs, each with a primary research focus. Rather that operating like the typical R & D division of a large company, these labs resembled biotech start-ups with their own top managers, budgets, and staff. This decision represented a departure from industry norms and was a dramatic change from Glaxos status quo. However, Yamada had the CEOs support and both believed in what was 146 Jones, Contemporary Management, Fourth Edition CHAPTER SEVEN THE MANAGER AS A DECISION MAKER being done. Yamadas willingness to take the risks required to enhance long-term viability, innovation, and success seemed to be paying off at Glaxo and did not go unnoticed. Yamada was later promoted to Executive Director and named to the companys Board of Directors....
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This note was uploaded on 10/25/2010 for the course MGMT 321 taught by Professor Spears,m during the Fall '08 term at Winthrop.
- Fall '08